ROI: A measure of marketing effectiveness
Return on investment, or ROI, describes the measurements companies use to determine payback received from their investment in sales and marketing efforts. In other words, is a print ad, radio spot, TV commercial or email proving profitable or not? And if profitable, which medium is providing the biggest bang for your buck?Based on the definition above, it is safe to assume that ROI is the primary measurement of marketing effectiveness, yet according to a recent survey, 56 percent of chief marketing officers report feeling ill-equipped to manage ROI. In addition, 57 percent say they don’t use any ROI analysis to determine marketing budgets—in fact, 28 percent are basing budgets on gut instinct alone. This all comes at a time when scrutiny over marketing efforts is increasing. If your company doesn’t want to become one of these dreaded statistics, it’s time to start measuring your ROI.5 steps to measuring ROI
Measuring ROI can be a challenge, which may explain why many companies aren’t doing it. Here are five simple steps companies can take to get started measuring ROI today.

  • Step 1—Define success: In order to effectively measure ROI, you must determine your company’s definition of success. In other words, what are your company’s key performance indicators (KPIs)? The KPIs your company cares about will be specific to its goals and marketing efforts; success measures could be the number of new leads, blog posts or downloads published. Tap your most valuable resource—your employees—to determine this information. Encourage sales and marketing personnel to submit factors they feel determine success. Enter participants in a draw for a Sensor Ultrathin Tablet Case, MP3 player or Tablet Keyboard Stand to show gratitude and encourage sharing.
  • Step 2—Set goals: Once your company defines and agrees upon its success measures, goals can be established. Goals should be realistic, measurable and adjustable. Data should be presented in a simple way so it is easy to determine whether or not a goal was met. Consider using a red/yellow/green ranking system. Provide a dry-erase board for each employee’s office where they can record their department’s goals and update progress with red, yellow or green dry-erase markers.
  • Step 3—Gather data: In many companies, data is collected and managed in multiple databases across multiple departments. Establishing an integrated system for data collection provides a clearer picture of sales and marketing effectiveness.
  • Step 4—Monitor goals: KPIs should be monitored frequently and consistently in order to stay on track. Proactively identifying shortcomings, such as declines in leads, page views or sales inquiries, helps determine when modifications need to be made to an existing plan or a new plan needs to be put into place.
  • Step 5—Utilize your data: Quit relying solely on gut instincts and let the data do the talking.  To make good marketing decisions and successfully justify your marketing budget (or department) to the powers that be, you will need to mine and use your data.

Remember, successful companies want to prove the value of their marketing efforts. For more information on ROI, check out our Blue Papers® archive.

Jensen, Sylvia. “4 Ways of Measuring Marketing ROI.It’s All About Revenue The Revenue Marketing Blog RSS. N.p., 26 Nov. 2012. Web. Retrieved 18 Dec. 2013.

Study Finds Marketers Struggle with the Big Data and Digital Tools of Today.PRNewswire N.p., 12 Mar. 2012. Web. Retrieved 19 Dec. 2013.

Rogers, David, and Don Sexton. “Marketing ROI in the Era of Big DataRep. Columbia Business School, 2012. Web. Retrieved 19 Dec. 2013.

Calculating ROI.” 4imprint.com. 4imprint, 06 Feb. 2014. Web. Retrieved 07 Feb. 2014.


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